Five Things You May Not Know About Insurance

Let’s face it, auto insurance is not a popular topic to discuss over a glass of wine at a friend’s house. Mostly, the topic of auto insurance usually brings up feelings of frustration and uncertainty; Frustration because it seems to be so unfair, and uncertainty because unless you work in the insurance industry, there are many things you may not know.

As an individual who started his insurance career in 2001, I would like to take the time to highlight five things that you may not know about auto insurance. In the end, I hope to remove the shroud of uncertainty when it comes to auto insurance, to assist you in confidently answering insurance-related questions, and most importantly, add value to your peace of mind. So, let’s jump into it, shall we? (drum roll)

1. When you lend your vehicle to someone, you are also lending your insurance. For instance, if your friend borrows your car to run an errand and has an accident while driving your vehicle, your insurance policy will pay for the damages and your insurance record will have a claim against it.

This began with the concept of No-Fault Insurance. Each insurer pays the losses of their own vehicle (exceptions can be made – a broker can help you with that).

TIP: talk to your insurance broker about All Perils

2. Demerit points do not affect your insurance. The insurance industry is governed by Financial Services Commission of Ontario, and has no affiliation with the Ministry of Transportation. So, if you are told to fight your ticket, to reduce your demerit points and save money on insurance, that is incorrect.

However, the severity of a conviction may affect your insurance rate. A conviction for 10 km/h over the limit may be rated differently than a conviction for 40 km/h over.

Q? Do you have conviction protection?

3. You cannot insure a vehicle under your policy unless the vehicle is in your name. Many times we have parents hoping to insure their child’s vehicle under their policy, however that vehicle must be in the name of the parent to do so. The only exceptions are married couples.

TIP: talk to your insurance broker about what could happen if this is not followed

4. The type of car you drive affects your insurance – okay, you knew that one. What you may not know is that it is not solely based on the cost of the vehicle. For instance, a Honda Civic may be more expensive to insure than a high-end Volvo.

This relates to statistics of claims related to a specific vehicle. There are not many 22 year olds drag racing a Volvo.

5. Lastly, have you ever wondered what the difference is between an independent insurance broker and an insurance agent? An independent insurance broker works for you, and an insurance agent works for an insurance company.

Imagine your personal shopper worked exclusively for one store; Wouldn’t that limit your options?
Well, there you go: five things that you may not have known about auto insurance. Hopefully, there were a few eye-openers that you can refer to the next time insurance comes up over a glass of Merlot.

I would like to leave you with one thought: Are you currently being provided an insurance policy, or an insurance experience? Challenge yourself to expect more, you might be surprised!